Taxes in the Netherlands in 2026

Who counts as a Dutch tax resident

Dutch law has no 183-day rule. Article 4 of the General Tax Act (AWR) requires residency to be judged on the full set of facts and circumstances, not on a day count. The tax authority, Belastingdienst, looks for where your centre of life sits.

What it weighs in practice:

• a permanent home in the Netherlands, owned or on a long lease;
• where your spouse and minor children live;
• registration in the municipal residents register (BRP);
• where you work or actually run your business;
• bank accounts, insurance policies, a family doctor, the children's school, club memberships;
• how much time you genuinely spend in the country.

Two consequences follow. First, you can spend well under six months here and still be treated as a resident if your family and home stayed behind. Second, the 183-day rule exists in the Netherlands only inside tax treaties, where it allocates the right to tax a posted employee's salary between two states. It never creates residency by itself.

If two countries both claim you, the treaty tie-breaker settles it: permanent home first, then centre of vital interests, then habitual abode, then nationality. Without a treaty there is no such procedure and dual residency has to be unwound by facts alone.

Moving mid-year

The year you arrive or leave is filed on the M-form (migratieformulier). The year splits into a resident period and a non-resident one: worldwide income for the first, Dutch-source income only for the second. Tax credits and national insurance contributions are prorated by month. The M-form takes longer to process than a standard return, so a refund for a migration year almost always arrives late.

How the 183-day threshold behaves in other jurisdictions is covered in our piece on tax residency and the 183-day rule.

Income tax: three boxes and the 2026 rates

Personal income is split into three boxes and losses cannot move between them. Box 1 covers employment, business profit and your own home. Box 2 covers a substantial interest of 5% or more in a company. Box 3 covers savings and investments.

The first band only looks heavy: of the 35.75%, actual income tax is 8.10% and the other 27.65% is compulsory national insurance. People who have reached AOW pension age do not pay it, so their first band drops to 17.85% (the band boundary is €41,123 for those born before 1946).

There is no personal allowance in the usual sense. Its role is played by tax credits (heffingskortingen), which come off the tax due rather than off the base.

Because of the credits, the real burden on middle salaries is well below the headline rate. The flip side is brutal: between €38,883 and €78,426 every extra euro is taxed at 37.56% and simultaneously erodes two credits, so the effective marginal rate approaches 50%. A raise inside that band delivers far less than it looks like on paper.

There are no local income tax surcharges. Municipalities do not tax income at all; they levy the OZB property tax and utility charges for water, waste and sewerage. That is a genuine advantage over Belgium and Scandinavia, where a communal rate sits on top of the national one.

Homeowners add a deemed amount to Box 1 income, the eigenwoningforfait: 0.35% of the WOZ cadastral value for homes below €1.34m and 2.35% on the excess. Mortgage interest is deductible, but in 2026 the deduction is capped at a 37.56% rate rather than 49.5%.

What a non-resident pays

A non-resident is taxed on Dutch sources only:

• salary for work physically performed in the Netherlands;
• Dutch real estate, through the deemed return in Box 3;
• income and gains from a 5%-plus interest in a Dutch company, under Box 2;
• business profit through a permanent establishment;
• certain Dutch pensions and state benefits.

Foreign accounts, brokerage portfolios, crypto and property outside the country are untouched. That is the fundamental difference from resident status.

Dividends from Dutch companies carry 15% withholding tax. For a non-resident this is effectively final unless a treaty lowers it and you file for a refund. Typical treaty rates are 5% for substantial holdings and 15% for portfolio investors. Ordinary interest and royalties paid abroad carry no withholding tax at all, apart from the conditional levy on payments into low-tax jurisdictions.

One category is worth knowing: the qualifying non-resident taxpayer (kwalificerende buitenlandse belastingplichtige). If at least 90% of your worldwide income is taxed in the Netherlands and you live in the EU, EEA, Switzerland, or on Bonaire, Sint Eustatius or Saba, you get the same deductions and credits as a resident, including mortgage relief on a Dutch home. Below the 90% mark none of that is available and you are taxed on gross Dutch income.

A trap for posted staff: the treaty 183-day relief only works when the employer is foreign and the cost is not recharged to a Dutch entity. If a Dutch company economically bears the salary, tax starts on day one.

Corporate tax and dividends

A resident company is taxed on worldwide profit; a foreign company only on the profit of a Dutch permanent establishment and on Dutch-source income.

What helps a small business is less the rate than the threshold: 19% applies to the first €200,000 of profit of each separate company. Put those companies into a fiscal unity (fiscale eenheid) and the group gets the low band once. Worth modelling before the structure is built, not after.

The participation exemption is the real reason holdings sit here. Dividends and capital gains from subsidiaries held at 5% or more are fully exempt, provided the subsidiary is not a passive low-taxed entity. No country restrictions, no minimum holding period.

The innovation box gives an effective 9% on profit from in-house development protected by a patent or backed by a WBSO declaration. It needs segregated accounting and, in practice, an agreed calculation with the tax authority.

The conditional withholding tax of 25.8% has applied to interest and royalties since 2021 and to dividends since 2024, where the recipient is a related party in a blacklisted jurisdiction or the arrangement is abusive. This is the measure that closed the classic conduit structures the country was criticised for over decades.

Setting up a BV takes a few days at a notary and the minimum capital is €0.01, though bank onboarding is considerably harder than incorporation. Details on the company registration page.

VAT: rates and the small business scheme

The standard VAT rate is 21%. The reduced 9% rate covers food, medicines, water, books and periodicals, passenger transport, bicycle and shoe repair, hairdressing, and also culture, sport and media, where the planned increase to 21% was reversed by law. A 0% rate with input recovery applies to exports and intra-EU supplies.

The headline change for 2026: short-stay accommodation - hotels, apartments, holiday park lodges - moved from 9% to 21% on 1 January. That is roughly an 11% jump in the final price, and not every operator managed to pass it on.

There is no registration threshold as such. An entrepreneur receives a BTW number on registering with the chamber of commerce (KvK) and charges VAT from the first sale. Relief comes from the small business scheme (KOR): turnover of no more than €20,000 a year, no VAT on invoices and no input VAT recovery. You apply at least four weeks before the intended start date, and the scheme ends from the very transaction that crosses €20,000.

VAT returns are normally quarterly, due by the end of the month after the quarter. Large filers are moved to monthly, small ones can ask for annual. For distance sales to consumers elsewhere in the EU there is a €10,000 threshold and the OSS single-window scheme, which lets you report every EU country through one Dutch return.

Social contributions: who pays what

Two separate systems. Volksverzekeringen, the national insurances, are paid by the individual and are already baked into the first Box 1 band. Werknemersverzekeringen, the employee insurances, are paid by the employer on top of salary and never deducted from the employee.

All in, an employer adds roughly 17-20% on top of gross pay, depending on contract type and the sector-specific Whk rate. On top of that comes statutory holiday allowance (vakantiegeld) of at least 8% of annual salary, usually already inside the quoted gross figure but not always - check the offer letter.

Separately, every resident must buy basic health insurance themselves. It is a private policy rather than a tax: insurers publish next year's premiums in November, and a policy excess (eigen risico) applies on top. Low earners receive a state subsidy through zorgtoeslag.

A BV owner with a controlling stake is normally outside the employee insurances: no Awf, no Aof, but also no unemployment entitlement. The Zvw levy still applies.

Capital taxes: Box 3, property, inheritance

Box 3 is the most contested part of the Dutch system. It taxes a deemed return on assets rather than your actual profit, so a year in which the portfolio fell still produces an assessment.

The counter-evidence rule (tegenbewijsregeling) softens this: you may show your actual return and pay on that if it is lower. But actual return is computed by Dutch rules - unrealised appreciation counts, and costs such as bank charges are not deductible. Moving Box 3 fully onto actual returns has been postponed twice and is now planned for 2028, with the bill still being amended.

There is no separate capital gains tax for individuals. A resident selling shares pays nothing on the gain, because Box 3 has already taken money every year. The exception is a holding of 5% or more, which falls into Box 2, where both dividends and sale proceeds are taxed at 24.5% up to €68,843 and 31% above.

2026 inheritance exemptions: partner €828,035, child or grandchild €26,230, disabled child €78,671, parents €62,110 between them, others €2,769. Annual tax-free gifts are €6,908 to a child and €2,769 to anyone else. A ten-year rule applies here too: a Dutch national who leaves the country is still treated as resident for inheritance and gift tax purposes for a further ten years.

On leaving the country, a holder of a 5%-plus interest receives a conserverende aanslag - a protective assessment on the unrealised gain, at Box 2 rates. Nothing is payable immediately and deferral is granted, but the assessment does not simply expire and can be collected on a later sale or a large dividend. The rules have changed several times, so the consequences of departure are worth calculating on the actual departure date.

The expat regime: the 30% ruling

The Netherlands has no permanent non-dom regime and no relief for foreign pensioners. The one meaningful benefit for newcomers is the expat regime, universally known as the 30% ruling.

It works simply: the employer pays out up to 30% of gross remuneration as a tax-free reimbursement of relocation costs. On a €100,000 salary that is €30,000 entirely untaxed and €70,000 into the tax base.

The 2026 conditions:

• you were recruited from abroad, not found already living in the country;
• for 16 of the 24 months before starting you lived more than 150 km from the Dutch border;
• taxable salary after the allowance is at least €48,013 a year, or €36,497 for an employee under 30 with a recognised master's degree;
• employer and employee apply jointly; to get the benefit from day one, file within 4 months of starting, otherwise it runs only from the month of approval;
• maximum term is 5 years, reduced by earlier periods of stay or work in the Netherlands.

What has changed. From 2026 the regime is capped at the WNT norm: it may be applied to salary of no more than €262,000, so roughly €78,600 a year tax-free at most. The transitional protection for older rulings has expired.

From 1 January 2027 the rate falls from 30% to 27% for rulings that started in 2024 or later. Earlier rulings keep 30% until the end of their five-year term, but their salary thresholds rise too.

The painful part for anyone with capital: partial non-resident status has been abolished. Ruling holders used to keep foreign assets out of Box 2 and Box 3 entirely - in practice a five-year exemption from the wealth levy. Those who obtained a ruling before 1 January 2024 have a transitional period, and 2026 is the last year it can be used. From 2027 a foreign portfolio lands in Box 3 for everyone. Bluntly: after this reform the Netherlands became a materially more expensive place for people with significant investment capital.

A resident's foreign pension is taxed under ordinary Box 1 rules. Which country gets to tax it depends on the treaty: state pensions usually stay with the paying country, private and occupational ones shift to the country of residence.

Filing, deadlines and penalties

Income tax on salary is withheld monthly by the employer as loonheffing, which is an advance payment. The annual return reconciles that advance with actual liability, applies deductions and reports Box 3.

Penalties. Late filing triggers a verzuimboete: tens of euros for an individual on a first offence and considerably more on repeats, around €3,400 for a company's corporate tax return and rising for persistent failures. Deliberate understatement triggers a vergrijpboete of up to 100% of the shortfall, and the law allows up to 300% for Box 3 income. Interest in 2026 runs at 5% on income tax and 7.5% on corporate tax, charged where the assessment is issued after 1 July of the following year. Filing before 1 May is the simplest way to avoid it entirely.

Audit. A statutory audit is required once a company exceeds at least two of three thresholds for two consecutive years: balance sheet total above €7.5m, net turnover above €15m, more than 50 employees. Small and micro entities are exempt and file abridged accounts they can prepare themselves. What the obligation covers and when an auditor becomes unavoidable is set out under audit and reporting.

Double taxation and treaties

The Netherlands has roughly a hundred double tax treaties in force - one of the largest networks in the world, and the historical reason the country attracts holdings. The mechanics are standard: the country of residence either exempts foreign income (the exemption method, typically for salary, real estate and permanent establishment profits) or credits foreign tax paid (the credit method, for dividends, interest and royalties).

There is no treaty with Russia. The 1996 agreement was denounced by the Russian side and ceased to apply on 1 January 2022. The practical fallout:

• dividends from Dutch companies to a Russian resident are hit with the full 15% withholding tax; the reduced 5% treaty rate is gone;
• a Russian resident individual cannot credit Dutch tax, because article 232 of the Russian Tax Code allows a credit only where a treaty is in force. Russian companies keep the unilateral credit under article 311;
• there is no tie-breaker, so in a dual residency situation both countries formally claim worldwide income and only a genuine severing of ties resolves it;
• the Netherlands applies its own unilateral relief decree (Besluit voorkoming dubbele belasting 2001), but it does not cover every income type and does not guarantee a credit for Russian withholding tax.

Across the CIS the picture varies. Treaties are in force with Kazakhstan, Armenia, Azerbaijan, Georgia, Moldova, Uzbekistan, Ukraine and Belarus. Kyrgyzstan, Tajikistan and Turkmenistan do not appear on the Dutch treaty list. Note separately that Belarus has suspended certain articles of its treaties with a number of European countries, so the status of a specific article should be checked at the moment of payment.

For a side-by-side of European burdens see taxes in Europe 2026, and the full country list sits in our taxes by country overview.

Worked examples: what you actually keep

All figures are illustrative: no mortgage, no partner, no children, no sector-specific rates. They show the order of magnitude, not your personal outcome.

Employee on €60,000

The employer pays roughly €10,000 of contributions on top, so the full cost of this employee to the company is around €70,000.

What the 30% ruling is worth on €85,000

A gap of more than €13,000 a year. Note the constraint: on a €60,000 salary the full 30% cannot be applied, because the base would drop below the €48,013 floor, and the allowance gets trimmed to roughly 20%.

Sole trader, €80,000 profit

Lower than for an employee on the same number, but with no safety net: no unemployment or disability cover and no pension unless you fund it yourself. The self-employed deduction is being phased down steadily - it was still €2,470 in 2025.

BV owner, €200,000 profit before director's salary

The combined burden on profit actually taken out as dividends is around 41%: 19% at company level plus 24.5-31% at owner level. Leaving profit inside the BV is cheaper, but then you cannot spend it personally.

€600,000 of capital in Box 3

A €500,000 portfolio plus €100,000 in deposits, held by one person, produces a deemed return of €31,280 (6% and 1.28% respectively). After the €59,357 allowance the taxable slice is roughly €28,185, and 36% of that is about €10,150 a year. That is 1.7% of the capital annually, whether the portfolio gained or lost.

The honest conclusion: the Netherlands is a high-burden, very well administered jurisdiction. People move here for the labour market, the infrastructure and the holding regime, not for tax savings. For someone with substantial passive capital it is straightforwardly expensive: Box 3 takes money every year regardless of results, and the one workaround, partial non-resident status, is being closed.

What matters most about taxes in the Netherlands

FAQ